North Wales businesses say access to finance is a big problem

COMPANIES in North Wales have told a member of the Bank of England’s Monetary Policy Committee they still face huge problems in getting the essential finance they need to keep their businesses ticking over.

COMPANIES in North Wales have told a member of the Bank of England’s Monetary Policy Committee they still face huge problems in getting the essential finance they need to keep their businesses ticking over.

Kate Barker rounded off a two-day visit to the region last night during which she sounded out the views of dozens of local companies in manufacturing, services and tourism.

She visited company premises, met members of North Wales Tourism and addressed a meeting of the West Cheshire and North Wales Chamber of Commerce.

Later Ms Barker told the Daily Post: “The main concern flagged up by Chamber members was the availability of finance for their businesses and the cost of finance.

“I agree that is an issue that is partly unresolved.”

Despite steps taken by the UK Government to unfreeze credit lines some banks are still rebuilding their shattered balance sheets and smaller firms are finding it hard to get funding.

The Bank of England has cut the bank interest rate to an historic low of 0.5% and has continued with its programme of asset purchases totalling £175bn.

Ms Barker said that it was now clear that prior to the financial crisis the cost of borrowing had been “too low” and the banks were now returning to a “more sustainable lending strategy”.

Employers body the CBI said this week that recent economic data suggested a slow recovery from the recession is underway.

“I get the impression after discussions with businesses here that although they are not steaming ahead, things are picking up,” said Ms Barker yesterday. “A lot of people said things were a bit better.”

But she said she was cautious about describing the situation as a recovery and said that while measures put in place to help the recovery would take some time to fully work through the economy might remain fragile.

She said that even as growth picks up unemployment was likely to continue rising – and there was therefore no immediate prospect of a “feel good factor”.

Young people coming into the jobs market and unable to find work was as much a matter of concern in North Wales as elsewhere in the UK, she added.

Neil Ashbridge, the Bank’s Agent for Wales, who accompanied her on the visit, said that tourism had suffered mixed fortunes this summer. Tourist attractions operators seemed to have performed well – suggesting a rise in the number of day trippers.

The MPC sets interest rates to try to meet the Government's inflation target.